West Texas Intermediate crude rebounded from the lowest level in five months before a report that may show U.S. fuel supplies shrank. Price declines the past week are probably excessive, according to a technical indicator.
Futures advanced as much as 0.9 percent in New York. Gasoline and distillate inventories fell last week in the U.S., the world’s biggest oil consumer, according to a Bloomberg News survey before data today from the Energy Information Administration. Crude’s relative strength index is below 30 for a fourth day, signaling that losses may not be sustainable.
“You tend to see a little bounce after prices have been falling for a while,” said Thina Saltvedt, an Oslo-based analyst at Nordea Bank, who expects Brent crude to stay within a range of $105 to $106 a barrel for next two weeks. “Prices have been quite high for the season as the market is well-supplied, so they should now stabilize until we get more news,” she said by phone today.
WTI for December delivery rose as much as 88 cents to $94.25 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.97 at 1:33 p.m. London time. The contract dropped $1.25 to $93.37 yesterday, the lowest close since June 4. The volume of all futures traded was about 40 percent less than the 100-day average.
Brent for December settlement gained as much as $1.08, or 1 percent, to $106.41 a barrel on the London-based ICE Futures Europe exchange. It slid 90 cents to $105.33 yesterday, the lowest since July 2. The European benchmark crude was at a premium of $12 to WTI, compared with $11.96 yesterday.
WTI has lost 5.4 percent in the past seven days. Its 14-day relative strength index yesterday fell to 25.9, the lowest reading since June 2012, according to data compiled by Bloomberg. Futures rebounded in April from about $86 a barrel when the chart indicator was most recently below 30.
“The price is completely oversold, and people are sort of looking for the chance of a rebound within a few days,” Tetsu Emori, a senior fund manager at Astmax Asset Management Inc. in Tokyo, said by phone. “We’re heading into winter, so I think demand will be increasing. I’m not really pessimistic.”
Daily exports of North Sea Brent, Forties, Oseberg and Ekofisk crudes, which make up the Dated Brent benchmark, will decrease in December by 1.3 percent from November to 987,097 barrels a day, according to loading programs obtained by Bloomberg News.
U.S. gasoline inventories probably decreased by 400,000 barrels in the week ended Nov. 1, according to the median estimate of 11 analysts surveyed by Bloomberg. That would leave supplies at 213.4 million, the least since November last year. Distillate stockpiles, including heating oil and diesel, are expected to have slid by 1.5 million barrels to 121.2 million.
Crude supplies may have expanded for a seventh week, climbing by 2.1 million barrels to 386 million, the survey shows. The EIA, the Energy Department’s statistical unit, is scheduled to release its data at 10:30 a.m. in Washington.
The industry-funded American Petroleum Institute yesterday reported an increase of 871,000 barrels in crude inventories, a 4.29 million drop in gasoline stockpiles and a 2.73 million decline in distillates.
The U.S. will account for about 21 percent of global oil demand this year, compared with 11 percent for China, the second-largest consumer, according to forecasts from the International Energy Agency.
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